What Is The Peter Principle? (With Examples)

By Sky Ariella
Oct. 19, 2022

Find a Job You Really Want In

It’s an unfortunate truth that many employees in the corporate world find themselves asking the question, “How on earth did my incompetent boss get his or her job?” There is a name for this phenomenon where leaders seem to be incompetent in their job for years at a time: The Peter Principle.

In this article, we’ll explain what the Peter Principle is, how to prevent it from happening, and what to do when it does happen.

Key Takeaways

  • The Peter Principle is a business management theory that holds that employees are promoted to the point of incompetence.

  • To keep the Peter Principle from occurring, only promote employees who are fully qualified to take on the role they’re being promoted to, not employees who are just doing well in the role they’re in.

  • If an employee is incompetent in a role they’ve been promoted to, give them additional training or transition them into a role that’s a better fit.

What Is The Peter Principle?

What Is the Peter Principle?

The Peter Principle is a business management theory that was first proposed in 1968 by Dr. Laurence J. Peter in his book titled under the same name. The principle comments on the structure of hierarchy-based businesses, in which employees are promoted based on a strong performance in their current position rather than actual merit or experience.

Due to this thrusting of employees through the system of promotions, individuals eventually land in a position that they’re not qualified for, and the incompetence shows. Once they reach a level that they’re struggling in, they’re no longer awarded with promotions and stay in this position they perform poorly in.

The Consequences of the Peter Principle

Under this reasoning and according to the Peter Principle, the majority of people who have been promoted to a position of power aren’t skilled enough to be there.

It’s not the fault of the employee that they end up in a role that they’re not qualified for.

Instead, it’s a consequence of a hierarchical system that rewards its employees by dispensing promotions.

How to Overcome the Peter Principle

Even though the Peter Principle has a bit of a mocking tone, its validity in the business world is at least partially founded in reality.

While it might not be the case across the board with all managers, as Dr. Peter suggests, it does describe a pattern that occurs in the hierarchical organization in a business. The Peter Principle depicts its conditions as bleak and inevitable; however, there are ways to overcome them.

Below are some tips for overcoming the Peter Principle:

  1. Promote the right candidate. While promoting the perfect candidate to an open role is easier said than done, there are a few ways to figure out who the right fit is.

    Firstly, avoid offering promotions to individuals simply out of office politics. An employee shouldn’t simply be given the reins to a position that puts them out of their depth simply because they’re working well in their current job.

    Instead of looking to employees who deserve a position because of hierarchical seniority, consider a candidate’s relevant skills and qualifications to decide if they’ll be able to fulfill the responsibilities of the role.

  2. Ask employees about their career goals. One great way to overcome the Peter Principle is by asking employees about their career goals. It outlines what they consider their strengths to be and where they’re hoping their career will take them.

    In the ranking system that Dr. Peter describes, it’s common for an employer to put aspirations in employees’ minds and turn these into their career objectives. A better alternative is to find out where they’d like to end up in their career early on.

  3. Provide additional training. Supplying training to employees not only improves their performance but also assists in beating the Peter Principle. This method works by enhancing an employee’s ability to perform in a role if they’re promoted into a position with more responsibilities.

    When someone has already been placed in a role that they’re floundering in, providing additional training might be the next best option to demotion.

  4. Consider giving a raise instead of a promotion. Often companies and employees assume that promotions and salary increases have to be given in tandem.

    However, if an employee is excelling in their position but isn’t necessarily qualified for a promotion, consider giving them the raise without the promotion — the extra money is often one of the most appealing parts of a promotion, after all.

    This practice helps employers recognize and fairly compensate employees for their expertise while avoiding promoting them to a job they aren’t suited for.

Signs That an Employee Has Been Promoted to the Wrong Role

A high-performing employee might thrive in their current role but still be wildly unprepared to take on a managerial role.

While a promotion at work is usually regarded as a major accomplishment worth celebrating, it quickly becomes a career nightmare if the employee isn’t qualified for the role.

Below are some common signs that an employee has been promoted to the wrong role:

  1. They can’t complete their tasks to satisfaction, even with guidance. When an employee can’t complete their job to satisfaction, it’s demonstrating that they weren’t prepared to take on the role.

    It’s natural to struggle in a new position; however, this behavior should dissipate with gradual experience in the responsibilities. When they’re not showing any signs of improvement in their work tasks, it’s a sign that they’ve been promoted to the wrong role.

  2. Their confidence is slipping. Being confident in one’s work is a huge part of being a productive employee. When someone has been put into a role that they don’t have the skills for, it’ll quickly chip away at their sense of confidence. It’s difficult to keep up a self-assured demeanor when someone isn’t performing well at their job.

  3. Co-workers are becoming affected by their lacking qualifications as a manager. While it’s difficult for the individual themselves to be plunged into a supervisory role that’s out of their professional league, it’s even more frustrating for the employees they oversee.

    Working with a manager who is incompetent in their responsibilities impacts the productivity and satisfaction of everyone they work with.

    When an entire team’s performance starts to slip under new supervision, it’s likely because an employee was promoted to the wrong role.

  4. They aren’t happy in the role. Even though the workplace can be an inherently stressful place, employees ought to be generally happy with their job.

    When a longtime employee suddenly becomes less satisfied with their work after a promotion to a different role, the switch was probably a poor choice.

What to Do When an Employee is Promoted Into the Wrong Role

Realizing that an employee has been promoted into the wrong role puts everyone involved in an awkward situation.

Nobody wants to rescind a promotional offer because someone isn’t performing in the job, and most companies go looking for other options before pursuing this course of action.

When you’ve realized that an employee has been promoted to the wrong role and it’s in danger of becoming a Peter Principle scenario, review the following possibilities of what to do:

  1. Communicate with the promoted employee. When an employee has been promoted to a role that isn’t a great fit for them, it’s important to establish open communication.

    Schedule a meeting to discuss the transition with the employee. This is a good chance to ask what the employee’s thoughts are about their performance.

    Oftentimes, an employee is aware of their lacking execution in the new position and is eager to receive assistance or feedback.

    Creating a comfortable space for communication between an employer and a wrongly promoted employee makes it easier to take necessary actions later if their performance doesn’t improve.

  2. Give extra training to help them succeed in the role. Since it’s not the fault of the poorly-promoted employee that they ended up in a position that they’re not qualified for, it’s the responsibility of the employer to try everything possible to prepare them for it.

    Providing the newly promoted manager with extra training or mentoring from other senior-level employees could give them the boost they need to succeed in a position that was initially very difficult.

  3. Transition them to a position that’s a better fit. When a company has provided the promoted employee with training, communication, and professional guidance to no avail, it’s time to consider the possibility of moving them to a different role.

    This doesn’t have to be as dramatic of a shift as reversing their entire promotion, but it releases them of some of the responsibilities they cannot handle.

    The difficulty in transitioning a newly promoted supervisor to a better-fitting role is that there needs to be an open position available that they have the skills for. If there aren’t any other jobs up for grabs, there isn’t much else the company can do.

  4. Demote them to their former role. While this is the last resort for companies who promote an employee to the wrong role, sometimes demotion is the only option left. Leaving the individual to struggle through a job that they’re not ready for hurts them, the employees they supervise, and the overall functioning of the company.

    It’s best practice to be conscientious and discreet when handling an employee’s demotion. Receiving a demotion to a former role can be an embarrassing situation for an employee, who might already be feeling like they were set up to fail.

    Keep their feelings in mind throughout the process and maintain the approach that a position transfer is the best choice for everyone, including the employee.

Signs of An Employee Who is Prepared to Be a Manager

It’s not all doom and gloom when it comes to employee promotions. Let’s not forget that it is a very exciting time when someone is prepared to take on the challenge of a new role.

In the spirit of positivity, below are some signs of an employee who is prepared to be a manager, regardless of the Peter Principle’s assumptions.

  1. They’re honest. When a company is entrusting an employee with the task of managing their team, they need someone who has integrity and will be completely honest with them.

    An individual who’s ready to become a supervisor sticks with the truth in every situation and doesn’t try to sugar-coat it to their benefit.

  2. They care about their team. The leader of a professional team needs to care about the employees that they’re guiding. An employee who values their co-workers and treats them with respect speaks to someone that’s prepared to be their manager.

  3. They’re strong communicators. Being an employee supervisor requires heightened communication skills because it involves dealing with a wide variety of personalities. When considering which candidate to promote to a managerial role, focus on the employees who display this level of communication skills.

How useful was this post?

Click on a star to rate it!

Average rating / 5. Vote count:

No votes so far! Be the first to rate this post.

Never miss an opportunity that’s right for you.


Sky Ariella

Sky Ariella is a professional freelance writer, originally from New York. She has been featured on websites and online magazines covering topics in career, travel, and lifestyle. She received her BA in psychology from Hunter College.

Related posts